Principled Agents?

The Political Economy of Good Government

Timothy Besley

Mainstream policy economics now pays more attention to the delivery of policy outcomes and how incentives and institutional change shape the effectiveness of government. But should these issues be studied against a background of purely self-interested public servants? There is plenty of evidence that many citizens are publicly spirited. Can their motivation be harnessed in the public interest? These lectures review how economic thought on these issues has evolved.

Principled Agents?

The Political Economy of Good Government

Timothy Besley

Description

What is good government? Why do some governments fail ? How do you implement political accountability in practice? What incentives do you need to put in place to ensure that politicians and public servants act in the public interest and not their own? These questions and many more are addressed in Timothy Besley's intriguing Lindahl lectures. Economic analyses of government usually divide into two broad camps. One which emphasizes government as a force for public good that can regulate markets, distribute resources and generally work towards improving the lives of its citizens. The other sees government as driven by private interests, susceptible to those with the power to influence its decisions and failing to incentivize its officials to act for the greater public good. This book adopts a middle way between the two extremes, the Publius approach, which recognizes the potential for government to act for the public good but also accepts the fact that things often go wrong. It shares the view that there are certain institutional preconditions for effective government but then proceed to examine exactly what those preconditions are. Timothy Besley emphasises that it is not just about designing an appropriate institutional framework but also about understanding the way incentives work and the process by which the political class is selected.

Principled Agents?

The Political Economy of Good Government

Timothy Besley

Table of Contents

1 Competing Views of Government The issuesThis bookBackgroundEconomic Policy MakingPolitical EconomyIncentives and Selection in PoliticsConcluding Comments2 The Anatomy of Government Failure IntroductionThree Notions of Government FailureThe Basic ModelGovernment FailureDemocratic Political FailuresA Dynamic ModelGovernment Failure in the Dynamic ModelResponses to Political FailureConcluding Comments3 Political Agency and Accountability IntroductionElements of Political Agency ModelsThe Baseline ModelExtensionsDiscussionConcluding Comments4 Political Agency and Public Finance IntroductionThe ModelThree ScenariosImplicationsRestraining GovernmentDebt and DeficitsGovernments versus NGOsCompetenceConclusions

Principled Agents?

The Political Economy of Good Government

Timothy Besley

Author Information

Timothy Besley is Professor of Economics at the LSE and Director of the Suntory Toyota International Centres for Economics and Related Disciplines (STICERD) at the LSE. He is also a Research Fellow at the Institute for Fiscal Studies and the Centre for Economic Policy Research (CEPR). He has acted as Co-Editor of the American Economic Review and Managing Editor of the Economic Journal. He is an elected member of the Council of the Royal Economic Society, the Econometric Society, and the European Economics Association.

Principled Agents?

The Political Economy of Good Government

Timothy Besley

Reviews and Awards

"How can democratic competition make a government of politicians act as a government for the people? Tim Besley has given us a broad and deep analysis of this fundamental agency problem which is essential to the theory of democracy. This is an important book for anyone who wants to study political science with the best analytical tools of modern economics."--Roger Myerson, William C. Norby Professor of Economics, University of Chicago

"How does the structure of democratic political institutions and organization shape policy choice? This path-breaking book boldly claims that well-designed institutions can help voters select politicians who are 'better:' more capable and more faithful to the fiduciary duties of public life. Novel in its emphasis on information, this unprecedentedly careful, thorough analysis of the 'agency' problem links voters' ability to screen out bad politicians and discipline rent-seeking with the competence, motivation, and alignment of politicians' preferences to explain a wide variety of political economy and public finance outcomes including debt accumulation, the size and scope of government activities, corruption, and political turnover."--James E. Alt, Frank G. Thomson Professor of Government, Harvard University

"A wonderful and important book, that combines state of the art analysis and deep knowledge of real world institutions to obtain novel insights about a fundamental issue. It should be read by all those who want to understand what it is that brings about good government."--Guido Tabellini, Professor of Economics, Bocconi University

"Tim Besley demonstrates how to analyze political agency in the intellectual middle ground left open in between the optimism of the traditional welfare-economics approach, and the pessimism of the traditional public-choice approach. The key to good government is institution design- in the best Federalist tradition- to improve incentives in policymaking and selection to public office. Quite simply, a great book by a great economist."--Torsten Persson, Director of the Institute for International Economic Studies